“Sometimes companies wonder why I’m there, they’ve never had a foreign investor visit before,” Stephen Mack, who helps oversee more than $100 million including the Frontaura Global Frontier Fund, which returned about 18 percent in 2012, said in a phone interview from Chicago. “You’ve just got to do the legwork.”
BankInvest’s Skov boosted holdings in East African Breweries after he learned during a November trip that the company is tapping into demand from Kenya’s poorest consumers.
Senator brand beer, introduced in 2004, has become popular among Kenyans who can’t afford the company’s premium brands such as Tusker, Skov said in a Jan. 15 phone interview from Copenhagen.
Nigeria Bets
To keep prices and costs low, Senator is distributed to local bars in kegs instead of individual bottles. The company also gets a tax break from the government because the beer has become an alternative to home-brewed alcoholic drinks that pose health risks, said Skov, who oversees more than $200 million.
While East African Breweries returned 88 percent in the past 12 months, the $2.7 billion company is valued at 22 times reported earnings, less than the average of 40 times for brewers in Africa and the Middle East, data compiled by Bloomberg show.
The stock’s 50-day volatility of 15 compares with a reading of 16 for AB InBev, the world’s biggest brewer. The Leuven, Belgium-based company, which has a market value of $151 billion, has climbed 53 percent in the past year.
When Mobius and von Hardenberg were looking for investment opportunities in Nigeria as bad loans to speculators sent the country’s bank stocks tumbling in 2009, they turned to Nestle SA for advice.
Growth Outlook
The world’s biggest food company, which has operated in Africa’s most-populous nation since 1961, said it trusted Lagos- based Access Bank to finance its local unit. The Templeton fund bought shares and was rewarded as the lender gained 136 percent in the past 12 months, lifting its market value to $1.6 billion.